Recent Rants
Smell the Roses
by Dale Allen Pfeiffer
Suicidal Tendencies
27/6/08 (www.mountainsentinel.com) Why does it seem that every time the price of gas goes up, motorists respond by driving faster? Is it some misguided belief that if they reach their destination quicker, they will use less gas? Or are rising prices and desperation invoking some lemming-like instinct to use up our energy resources as quickly as possible, accelerating global climate instability as we make a mad rush toward oblivion. Slouching toward Bethlehem could not be farther from the truth, we are racing toward it.
Back in the 1970s, when US oil production peaked and started to decline, sparking the oil shocks of that decade, the government responded through gas rationing, lowering the speed limit to 55, and a host of other measures designed to spur energy conservation. Then Reagan came along and denial and conspicuous consumption were elevated to patriotic duties.
Now, as oil prices aim for the stratosphere, there is no talk of rationing, or even slowing down. But wait, there is one low traffic site urging people to simply slow down.
Green Slow Moving Machine
Fulton "Jay" Hanson (no relation to Jay Hanson of dieoff.com fame) maintains a blog urging people to make a difference simply by slowing down. Greenslowmovingvehicle.com makes a very good argument for the savings that accrue from simply driving a little slower. I urge everyone to visit this site and consider taking an active roll on the slow movement. The site draws a lot of its information from government studies that deserve to be loudly trumpeted.
from www.feuleconomy.gov
All vehicles achieve their optimum gas mileage at speeds between 50 and 60 miles per gallon. And as gasoline prices climb above $4/gallon, we are talking about a substantial saving here. The rule of thumb is that for each 5 mph you drive over 60 mph, you are paying an additional 30 cents per gallon. That is cumulative. In other words, if you are driving 75 mph, then you are paying an additional 90 cents per gallon.
Driving faster than 60 mph reduces fuel economy due to a number of factors. The energy necessary to overcome rolling resistance of the tires and other frictional effects within the mechanics of the car increases directly with velocity. The power required to drive the pumps in the vehicle increases with the square of velocity, and the energy required to overcome wind resistance increases as the cube of velocity. So as your speed increases, the amount of energy necessary to drive the vehicle increases many times over. A more detailed explanation can be found at the How Stuff Works website (What speed should I drive to get maximum fuel efficiency?)
Some folks seem to think that new vehicles are designed to drive faster. The EPA regularly calculates data on fuel economy. The following table is based upon their data. It shows that for all vehicles, maximum fuel economy is achieved at speeds around 55 mph. Data from real road driving tends to be lower than EPA data, so your fuel economy is likely to be less than that listed in the studies.
Model |
40 mph |
50 mph |
60 mph |
|
mpg |
mpg |
mpg |
sub-compact |
35 |
36 |
29 |
compact |
28 |
30 |
27 |
midsize |
21 |
22 |
20 |
van |
15 |
17 |
13 |
luxury |
13 |
14 |
12 |
table from http://www.greenslowmovingvehicle.com/
data from the EPA: http://www.epa.gov/fueleconomy/data.htm
So it really does pay to slow down and drive between 55 and 60 mph. Just think of it as a fun way to mess with people's heads and save money. While all those irate leadfoots are zooming past you, keep in mind the money they are throwing away with their need for speed (not to mention the extra pollution they are adding to the atmosphere, and their race towards energy impoverishment).
Other Money Saving Tips
AC vs Rolling Down Windows
There have been a lot of arguments over which is more energy efficient, using AC or rolling down the windows. Consumer Report's auto-test department finds that AC use will reduce a car's fuel efficiency by up to 10%, at speeds below 45 mph. However, at speeds over 45 mph, wind drag becomes a major factor, decreasing fuel economy by 10% and more. So in the city, roll down the windows, and on the expressway turn on the AC. (Source: http://www.bankrate.com/brm/news/auto/20050804a1.asp)
Reduce Vehicle Weight
Every 100 pounds of load reduces your fuel economy by up to 2%. Lighten up.
(Source: http://www.fueleconomy.gov/feg/driveHabits.shtml)
Avoid Idling
Idling reduces fuel economy to zero. The larger the engine, the more gas that is wasted. Modern vehicles do not require warming up. So when you are caught in a traffic jam or waiting for a long train to pass, stop your engine.
(Source: http://www.fueleconomy.gov/feg/driveHabits.shtml & http://www.bankrate.com/brm/news/auto/fuel-efficient/4.asp)
Avoid Rapid Acceleration and Excessive Braking
Try to drive as smoothly as possible. Resist the urge to stomp on the gas when the light turns green. Conversely, do not ride the brake. These bad habits can lower your fuel economy by up to 33% on the freeway, and 5% around town.
(Source: http://www.fueleconomy.gov/feg/driveHabits.shtml)
Don't Drive
Avoid making unnecessary trips. Walk and bicycle whenever possible.
There are other ways to improve your fuel economy. Generally speaking, drive sensibly, be a smooth driver, avoid rush hour and combine trips. Using cruise control on the freeway tends to save on gas. Also, when you use overdrive gear your car's engine speed is reduced, at a savings.
If you were CEO of Exxon/Mobile
If you were the CEO of Exxon/Mobile and you knew that within the decade oil production was going to head into an irreversible decline while the price of production would inexorably climb, what would you do today? Well, you might drive up the price of oil now to maximize your profits before the decline. Then you could milk as much money out of the market as possible and be in an optimum position once the decline does begin.
Now I'm not saying oil prices are being manipulated for the reason stated above. However, given the coming peak and decline of oil production, the current situation fits the best scenario for maximizing company profits. You can bet oil executives and investors are not complaining about the current price of oil.
What we are seeing, whether intentional or not, is an economy being primed for collapse. The Fed is flooding the market with dollars. Most of the traditional ways to invest this excess money are currently unappealing. So investors are pouring all of this funny money into oil and other goods (such as grains). As a result, prices are skyrocketing and the wealth of the world is being quickly transferred from the majority to the elite minority.
Every time you purchase a gallon of gasoline or a loaf of bread, you hasten this transfer of wealth, giving your hard-earned money to those who are already glutted with their own fortunes. Likewise, every time income taxes are lowered or adjusted and sales taxes are raised, it aids this transfer of wealth.
Gas prices are currently $4/gallon and nearly $5/gallon for diesel. By the end of summer, gasoline is expected to cost $6/gallon — possible even $7. And if we go to war with Iran, we could very quickly see $10/gallon or higher.
We are approaching a currently unknown limit that will bring our country to a halt. When people can no longer afford to drive to work and truckers have to park their rigs and walk away from them, our civilization will be crushed overnight.
And those who are currently reaping the profits do not seem to care. When the smoke clears, they will have transferred the country's wealth — if not the world's — to their own personal accounts. And they will then be able to pick up what is left for pennies on the dollar.
Something has to be done about oil speculation. However, if new regulations simply act to roll back the price of oil, they will do us a disservice in the long run. The price of gasoline should probably be $4/gallon right now, but half of that should go toward developing a decent mass transit system, before declining oil production really does hit us. We need to prepare. We need mass transit. We need to redevelop our railways, and we need to restructure our communities so that work, school and food are only a walk away. We need to redesign our food distribution system so that most of the food we eat is produced within 100 miles of our home.
Instead, the money necessary to prepare for the future is being given to profiteers.
The Smell the Roses Revolt
To paraphrase the late Utah Phillips, in an oil-based civilization, walking and riding bicycles are revolutionary acts.
There is no profit to be made from conservation. There is no profit to be had from slowing down and smelling the roses. That is why our leaders want us to go on consuming as much as possible. Hurry to work, hurry to the store, and use those credit cards to keep everything running smoothly. Be sure to buy the latest cellphoneipodblackberry and use it as much as possible. And when it becomes obsolete next year, dispose of it and buy the latest model.
Remember, consumption is your patriotic duty. Going into debt is your patriotic duty. Drive as fast as possible with your flag decals on the bumper. When reality starts to feel a little uncomfortable, grab a beer, turn on the TV and do a little home shopping.
But if you should desire a saner, healthier and more fulfilling world, then slow down. Or better yet, park the car and go for a walk. And please take the time to smell the roses.
Where should I Go?
by Dale Allen Pfeiffer
June 18th, 2008 Foreword
June 18, 2008 (www.mountainsentinel.com) The following article originally appeared in The Mountain Sentinel two years ago. Currently there are a number of people making panicky statements that everyone needs to relocate. To present a fair assessment of the idea and to help calm people down, I have decided to reprint this article for free.
Since this article was written, my family has moved from Appalachian Kentucky to Evansville Indiana. Evansville is not a haven of preparedness. It will face many problems as we enter an age of energy depletion and impoverishment. Our reason for moving here is that we have a lot of family in this area, and family can be a far more important resource than any other.
My daughter is in public schools now. While she does battle with the authoritarian rigidity, patriotic propaganda and religious zealotry that plague the public schools, she is at least making friends.
For my part, when I can spare a little time from working on novels and short stories, or playing the fiddle and the banjo, I do a little work with the local sustainability group, and the food co-op.
As this article asserts, there is no place in North America that is ideally prepared for the joint crises of resource depletion, environmental destruction and economic impoverishment that now loom before us. Relocation is an option, but for many people it is not the best option — perhaps for most people.
The Delusion of Survivalism
Many people have asked me where they should go to survive the end of the oil age. People asking this question generally fall into one of two groups, those who believe that civilization will disintegrate into lawless chaos where former neighbors will be preying upon each other and hordes of murderous starving bandits will swarm out of the cities to feed on the suburbs. The other group are those who see things breaking down, but not to the point where they must seek to defend themselves against every stranger. These people want to find a community and/or a farm where they can become self-reliant.
I will address the total breakdown group first. If there is a total breakdown of civilization and we are left with neighbors preying upon neighbors, then there is no place you can go. Whatever remote mountain hideaway you sneak off to, in this scenario you will have to deal with pillagers out to take what little you have. Anywhere you go, there are already people there.
In this day and age, the only places you can go to hide away are lacking in human population because they are so inhospitable. There are so few people there because it is so difficult to live there. And the few people who already live there probably meet that ecosystem's limited carrying capacity for human beings.
As someone who has lived alone in the wilderness, I have to ask you: do you really want to be a hermit. Do you want to spend your entire day struggling for the basic necessities? Can you make your own clothing, build and maintain your own weapons, grow, forage and hunt enough food to feed yourself, lay in a sufficient store of fuel to keep you from freezing in the winter? The list goes on and on. Sure, you can survive off what you forage and hunt, make clothes and blankets out of hides, and live in a debris hut; but do you really want to?
Stop romanticizing about the myth of the rugged individualist. It is just that: a myth. Almost all of the rugged individualists I have met were maladjusted misanthropes who would likely have been institutionalized if they had lived among others. This is not to say that I have not known many sane and balanced mountainmen and mountainwomen. But the sane ones do not live in total isolation, however limited their interaction might be, they are part of a community.
Consider indigenous peoples throughout the world. They are not rugged individualists. They all belong to tribes. Their sense of identity is closely linked to the community of which they are a part. It is their family and their safety net. They could not imagine trying to make it on their own and would wonder why anyone would ever want to do such a thing. When they are taken out of their tribal setting and placed in modern civilization, they are lost without their community.
The pioneers were not rugged individualists. They knew that community was the key to their survival. They worked together to build their community, plant and harvest their crops and provide everyone within their community with the necessities of life. It was only with difficulty that their sense of community was squashed by the modern industrialized community and the centralized state.
Let's get this straight. The myth of the rugged individualist is extolled by the dominant socioeconomic system because it helps cover up the atomization of society, and it leaves the disillusioned and disenfranchised uninclined to work together towards an alternative.
And where did you ever get the idea that you will have to fight your neighbors for survival, or that the cities will unleash hordes of desperate degenerates to pillage the countryside? This is an unlikely scenario. Sure there might be a rise in crime if the established order breaks down, or there might not. In large part, this depends on us.
When we look at examples of collapse, we do not see much real change in the crime rate. In a socioeconomic collapse, here does seem to be a relationship between the crime rate and the strength of community. The more tightly knit the community is, the lower the rise in crime, and vice versa.
During the Great Depression, people helped each other. Though they may have little to share, they did share it. During the collapse of the Soviet Union, people helped each other. Even in North Korea, people helped each other — though they were terribly repressed by there government.
The counter-argument is that this is a different situation. There will be no recovery, and in the US people are atomized, selfish and overly competitive. We are no longer predisposed to help each other, and there is very little sense of community left. Where people were once loyal to their community, they are now loyal to their company. And if that company closes its doors to them, they will do whatever it takes to survive.
My answer to that is Argentina. The people there were highly atomized and terrorized. More so, even, than people in the US. Decades of experience taught them not to concern themselves about their neighbors; to look out only for themselves. But when the Argentine economy collapsed, the people banded together to create one of our best examples of how people can respond positively on a grassroots level to a collapse. For details on this, I refer you to my article Coping with Collapse; Examples from Argentina in the The Mountain Sentinel, Vol. 1 No. 1.
The scenario that the collapse of the dominant socioeconomic system will result in a dog eat dog situation is another myth. This myth most likely evolved from the misconceptions of social Darwinists. It is reinforced by the fear mongering of the US news media which portrays our communities as dangerous places full of murderers, rapists and thieves. And it is fleshed out by our entertainment media (that is our manufactured perception of reality) that thrives on cop shows and violence.
We are taught that it is a dog eat dog world, where you must always watch out for the other guy, and where the successful businessman is he who reads The Art of War. Then we internalize the perception of crime and violence that we are fed daily by our media. It is no wonder that we wind up projecting our own fears and insecurities onto the world around us, believing that the collapse of the dominant system will leave us fighting each other for our very survival.
Hog wash.
Where to Go
Okay, we have done away with the myths of survivalism. Now to address the second group: those who worry that their community is not prepared for the collapse of the dominant system and who are honestly wondering what to do and where to go. Let's start off by stating that there is no place that is fully prepared for the collapse. There are a few places where a portion of the citizens in aware of the approaching problem and are beginning to prepare for it, but these places are at present very few and would be quickly overrun if we all headed there. As of this writing, most communities are unprepared and very few people are even aware of the pending problem. So, for the most part, you can forget about moving into a community where people are already aware of the problem and are actively addressing it.
Now, where should you live? There are four choices: wilderness, rural, urban and suburban. Each has its own benefits and drawbacks; except for suburban, which has most of the drawbacks of both rural and urban with few benefits.
If you are living in a wilderness area, you will want to become completely self-sufficient and you might want to hide your location as well. We have already discussed wilderness living somewhat in the section above. It still presents a viable option, which would probably be best pursued if a group of likeminded people move to the wilderness to establish their own community. The difficulties in doing so would be very similar to the difficulties encountered by the first settlers who came the North America, but would be further complicated by the fact that the remaining wilderness areas are largely inhospitable areas that cannot sustain too many people.
If you are living in a rural area, then you will want to become a family farmer living as part of a farming community. A farmer's life can be a hard life, but it is not without its rewards. One major benefit of being a farmer is that, so long as you can hold onto your land, you will have food. Bear in mind, farming is not something you just decide to do. Even if you have the right skills and a knowledge of farming, it will take some years of preparation, trial and error before you have gained enough experience to even begin becoming a self-sufficient farmer. Perhaps your greatest resource will be the advice of the experienced farmers who are your neighbors.
If you are in an urban area, you will want to organize your community so that you can survive with the cooperation of your community. You will want to establish community gardens, and self-sufficient utilities such as water and sewage. And you will need to form an agricultural cooperative with outlying farmers, to help supply your community with the food you cannot grow.
It is those living in the suburbs who would be wisest to pull up stakes and move to one of the other three areas. Suburbanites are too widely scattered to build any sort of functioning community, yet too concentrated to feed themselves by farming. If most of the residents of a suburb move away, the few remaining might be able to plow up all of the lawns and become farmers, but they will be lacking the support communities that are already established in rural areas. The worst off of the suburbanites will be those who live in trailer parks, closely followed by those who live in condos. There are simply too many people in these locations and the living quarters simply won't be viable without heating, electricity, water or sewage treatment.
Do You really Want to Move?
If you move, you will be the new kid on the block. Even in wilderness areas, there are residents who will look on you as the new-comer. You may always be the outsider. And if things become difficult, you may be persecuted simply because are new.
If things have become difficult before you even begin to consider your move, then you probably won't be welcome anyplace else. Communities struggling to survive are not going to welcome the displaced.
If you move too far away, you will have to contend with cultural and language differences. These differences will mark you and serve to keep you apart. If you move to a small town in the south and do not join a church, then you are likely to remain isolated. If you are moving as little as 300 miles south or north of your current latitude, you will likely find yourself in a different climate. Though you may have been an experienced gardener in your former home, you will have to learn what to grow in your new location and when to plant it.
Stop and think for a moment. If you have been living in your present location for several years, then you know what is around you. If you need something, you know where to go to find it. And you know what neighborhoods to avoid. You have a network of friends and acquaintances. You know where the local farmer's market is, where the food co-ops are, and where you can find community activists with whom you can work. And, though you might not realize it, you probably know where to go to fish, to hunt, to forage.
In your new location, you will know none of that. If times are already getting hard when you make your move, then you will be at a distinct disadvantage.
Although the idea of moving might have some appeal — certainly, the grass is always greener — do you really want to move? You need to decide whether it would be preferable to move to a new and unknown community, or to help organize the community where you are already at home. Instead of asking "Where should I go?", you should be asking "Where do I want to live?" And, if you honestly consider all of the possibilities and important factors, your answer might be to stay right where you are and get more involved in your local community.
Speaking from Experience
Early in the year 2001, we had a family catastrophe that forced me to leave my position, pull up stakes and move. All of our savings was used up paying for medical and legal expenses. With what little we had left, we had to find a new home in an area where I could find no employment in the field for which I was trained. We wound up buying a trailer in a mobile home park, and went to work as a substitute teacher until I could make enough money as a journalist and author to leave that job.
We lived in that trailer park until summer of 2005. Although we were grateful to have a roof over our heads, the neighborhood was bad and the trailer was too small. Our yard was a small lot composed of shaded sand and acidic soil. We couldn't grow anything on the little land we did have. From the beginning, we knew that we would have to get out of this trailer park, preferably before the economy went sour.
In summer of 2005, we did make a move, all the way from Michigan down to Kentucky. The major factor in choosing the location was the proximity to relatives in southern Indiana and Tennessee. The price of real estate and the affordability of a mortgage were also major factors. There were other factors that I won't get into here. In hindsight, although we now have more room, a better yard and a much safer neighborhood, the move has not placed us in a much better position.
The town we live in, as it turns out, is a dead town that has been overtaken not by suburbs but by suburbanites. While it looks like a small town, and it has a local government (indeed, it is the county seat), it is not a functional town in the sense that the residents meet all of their needs locally. We drive 20 miles to do our grocery shopping, and 60 miles to do any major shopping, or to reach the only decent food co-op in the area. Most of the people who live in this town make a 20 to 60 mile drive to work every day. When the price of gasoline climbs over $4.00 per gallon, people around here are going to have a very difficult time carrying on with their lifestyles.
We are very isolated in this community. We are not church-going people, and so there is no social interaction with our neighbors. We have been invited to attend a couple of the local churches, and though we have been tempted to go simply for the socialization, we can't bring ourselves to actually do so. We have started attending services at the Unitarian Universalist church 20 miles away, but none of the other members reside in our area.
Our daughter, who is now 14, has no friends. When we first moved here, we sent her to public schools. Though we quickly found that the local schools were 3 years behind the schools she attended up in Michigan, we kept her in the school so that she could make friends. She did meet a couple of girls who were friendly, she did not socialize with them outside of school because we did not attend their church. Other kids teased her because she was different. In the end, we started home schooling her. We have found her one friend, who subsequently moved 40 miles away. And it is mainly to provide her with social activity that we began attending the Unitarian church.
Last summer we planted a large garden, but most of it failed because of the heat. We did get a good crop of green beans, a fair crop of carrots and a few tomatoes, but everything else failed, including corn, squash (zucchini, summer and acorn squash), cabbage, broccoli, cauliflower, and peas. We have since learned that down here peas should be planted early in the spring, while cabbage, broccoli and cauliflower should be planted at the beginning of September. But nobody down here did well with their gardens this summer. It was too wet in the spring and again in at the end of summer, while midsummer was much too hot and dry. And fall has struck hard and cold this year, so fall/winter crops are suffering as well.
Michigan had a lot of state land where I could hunt, forage and simply enjoy nature. And there were any number of lakes up there for fishing, not to mention the Great Lakes. Because it was largely settled before becoming a state, Kentucky has very little open state land. It is mostly private land and some national forest. There are some rivers down here, but I don't know that I would eat anything out of them, even if I knew where to fish them. And there are a few small manmade trout ponds where you can pay to fish in a puddle so small I would have a tendency to caste right over the water and hit the guy on the far shore. I wouldn't know where to hunt around here or where to forage. And half of the plant I normally forage for — such as cattail or boneset — are comparatively hard to find around here.
No doubt, if I had grown up in Kentucky, none of this would be a problem. I would know where to hunt and forage, or I would know who to ask permission to hunt and forage on their land. And we would be recognized members of the community. But, as it is, it was a mistake to move here, and now my hope is to get out of here before things fall apart. I wish that somebody had given me the advice I have tried to pass along in this essay, and I wish that I would have listened to it.
Dealing with Gasoline Prices
Why prices are rising, what isn't being done about it, and what it means for you
by Dale Allen Pfeiffer
The Genie
June 8, 2008 (www.mountainsentinel.com)
What is going on?
Oil prices surge to $100 per barrel, $120, $130, with no end in sight. And analysts are now talking about $200 per barrel by the end of summer.
Gasoline prices have reached $4 per gallon in the US. And now they are saying we may see $6 per gallon by summer's end. Some analysts are saying gasoline prices will eventually reach $12 to $15 per gallon.
What is going on? Is this peak oil with a vengeance?
Yes and no.
There are three reasons why oil prices are skyrocketing, and peak oil is only indirectly involved.
The peak oil gene is out of the bottle, at least so far as investors are concerned. They only have a partial understanding of peak oil, but it is enough for market speculation to drive prices out of sight.
Oil production has not peaked. It is constrained and it can no longer keep up with growing world demand, but it has not peaked yet, so far as we can tell.
World oil production is approaching peak. It is no longer increasing as it once did. What is perhaps more important, there is no more spare capacity left in the system. At $130 per barrel any spare capacity has already been put into production. That is why Saudi Arabia has politely refused Bush's request that they increase production. They are pumping everything they can.
Simply the specter of peak oil is enough to fuel market speculation, making a few people very rich while the rest of us must empty our pockets at the gasoline pumps.
On top of this, we have the devaluation of the US dollar. The petrodollar has become the Frankenstein monster, and now it is running amok.
What we are seeing is nothing less than the failure of the free market. And without intervention, the failure of the free market will make a shambles of the world economy and lead to massive impoverishment and even starvation.
The Stupidity of Our Elected Leaders
So where are our leaders? They are arguing about who is to blame while trying to assure the public they will fix the problem. Our elected leaders either do not understand peak oil or refuse to acknowledge it. They are still worshipping at the alter of the free market, even as their god demands greater and greater sacrifices without delivering anything in return.
So now we have a congressional committee looking into high oil prices who can't understand why investments in domestic exploration and production do not pay. We have presidential candidates shaking their finger at OPEC and the oil majors, and we have a justice department suggesting they might attempt to sue OPEC for not opening up the spigot.
Where were all these people when Congressman Bartlett delivered his energy depletion seminar on capital hill a few years ago? Where were the members of the congressional committee investigating oil prices? Where were Clinton, Obama and McCain? They certainly weren't in attendance.
I do wish the US Justice Department could sue OPEC. If that were to happen, OPEC's most successful defense would be to say they had already opened the spigots all the way. They would then have to prove this once and for all, and everyone would know exactly where we stand.
But that isn't going to happen. Instead, our leaders are going to point fingers, suggest cosmetic fixes that will have little to do with the actual problem, and hope irrationally that prices will eventually collapse.
Oil Graft
Don't get me wrong. The energy companies certainly hold their share of the blame. They should have made us aware of this problem years ago and taken steps to help everyone prepare for it. They should be honest with us now.
The oil majors are certainly capitalizing on the current situation. The oil market is poised to take full advantage of rising oil prices.
One casual observation is enough to drive home this point. I have a friend who owns a music store situated next to a gas station. He has sat in his store and watched the gas station raise prices twice in one day, though no tanker has delivered fresh gasoline to the station. He has watched the gas station raise its prices just as rush hour traffic was beginning to hurry home in the afternoon.
There is no other business where the price of current stock is raised because of future speculation. As my friend says, if the price of guitar strings goes up, he does not reprice what he has on the shelf. He sells his stock at the same price and raises the price when he reorders.
However, you cannot place too much of the blame directly on the oil companies. They are simply being model businessmen. If the oil business is at fault, then it is a fault of the free market, and it will only be resolved by nationalizing the industry.
The Situation in a Nutshell
So our elected leaders and our business leaders are going to point fingers at each other and whine without doing anything to really solve the problem. That should be a granted.
We have uninformed leaders operating from selfish hidden motivations. We have experts who worship in the temple of a false god. We have a media that is compromised to the point that it cannot be expected to honestly inform. And we have an uninformed, undereducated public, living in a frame of reference that keeps them easily misled and even easier to manipulate.
What we are seeing is the beginning of the spoiled brat rebellion, while potential leaders vie for a position to take full advantage of that rebellion.
Because the current rise in prices is largely due to speculation, there may very well be a collapse in prices somewhere in the future. And should that happen, there will be a chorus of disinformation claiming it is proof that peak oil is a myth. And the majority of the public will return to their somnolent lifestyles.
Or prices may remain high until world oil production does actually begin to decline, at which point a bad situation will become much worse.
You can be sure, however, there is some critical price at which the system will collapse. This will happen when oil reaches a price too high for business to continue. I can't tell you what that critical price is, I can only ask: how high must gasoline prices go before you have to park your car and stop driving?
We can get some idea of what the climbing price of gasoline will mean for each of us.
Gasoline Prices and You
According to the US Census Bureau, the median income per household member (including all working and non-working members above the age of 14) was $26,036 in 2006.(1) This breaks down to about $72 per day.
According to the Bureau of Traffic Statistics, people in the US travel about 40 miles per day outside of their commute to work.(2) Elsewhere, we find the average work commute to be about 16 miles one way.(3) Another source suggests that men of working age travel an average of 18,000 miles per year by car, while women of working age travel only 10,000 miles per year.(4) For simplicity, let's accept the 18,000 figure for men and women. That is then broken down to 50 miles per day. Considering that gasoline prices have already acted to limit non-occupational travel, lets accept the figure of 50 miles per day as representative of current driving averages.
Data on average gas mileage varies considerably. The National Highway Traffic Safety Administration estimates average gas mileage of cars sold in the US in 2004 to be 24.7 miles per gallon.(5) Many of the vehicles on the road are older than 2004 models, and even most 2004 or newer models have declined in fuel economy since their purchase. Furthermore, as nearly half of all consumer road vehicles in the US are "light trucks", the average gas mileage is probably closer to 17 miles per gallon.(6) However, we will go with the 24.7 mpg figure for the sake of this discussion.
Given that the average person in the US earns $72 per day, and drives an average of 50 miles per day with a fuel economy of 24.7 (or 25) miles per gallon, we can generate a table to explore how much of a bite rising fuel prices will take out of daily income.
At $4 per gallon, gasoline consumption will take 11% of daily income. It is expected that gasoline prices might rise above $6 per gallon by the end of summer. Such an increase would require 17% of daily income to meet gas needs. The percentage of income spent on gasoline climbs over 20% as we approach $8 per gallon. And a price of $12 per gallon would eat up fully a third of the average income. Half of the average income would disappear into the gas tank at $18 per gallon. And at $36 per gallon there would be nothing left of the average income.
Now, let us bear in mind that this average income is a median. That means half of the population earns less than that amount. The rise in gasoline prices will have a much more drastic effect on this half of the population. To see how it will affect them, let's look at the minimum wage.
The current federal minimum wage for covered nonexempt employees is $5.85 per hour. That works out to just under $47 per day, or $17,155 per year. According to the Bureau of Labor Statistics, in 2004 there were 520,000 people earning the minimum wage in that year, and another 1.5 million people earning less than minimum wage.(7) Let's see how these 2.02 million people will fare with rising gasoline prices.
This portion of the population is already spending at least 17% of their wages on gasoline. By the end of summer, they could be spending over a quarter of their income on gasoline. And, at $12 per gallon, they will spend more than half of their income putting gas into their vehicle.
I can think of nothing better to demonstrate what a travesty is our current minimum wage. For those who argue that a rise in the minimum wage will hurt employers, I point out that as gasoline prices rise, the minimum wage will literally amount to a slave wage. It will not be long before no one can afford to take a job for minimum wage.
Both of the above charts also point out what an insult is the Bush tax rebate. At $4 per gallon, this rebate amounts to enough gasoline to meet average driving demands for 75 days. Or 50 days at $6 per gallon. For those who only receive $300 in their tax rebate – that is, for the minimum wage earners, Bush is offering to subsidize their gasoline for 38 days at $4 per gallon, or 25 days at $6 per gallon. It would be better to apply this money to the record budget deficits resulting from Bush's illegal wars.
As gasoline prices increase people will have to take money from some other part of their family budget to pay their gas expenses. The following chart contains the Bureau of Labor Statistics average US cost of living statistics.(8) The dollar figures are from a suggested yearly income of $30,850.64.(9) This figure is much higher than the census bureau's median income.
We can see that these figures do not take into account the current surge in gasoline prices. Motor fuel has already grown to twice the percentage listed here. And as that figure continues to climb, it will usurp other expenses, starting with Recreation and Other Goods and Services. Next it will displace Household furnishings and operation, Education and Communication, and then Medical Care and Apparel.
Note that these percentages are for average income families. For those below average income, the percentage spent on Housing and Food must be higher, while the percentage spent on Recreation and Other goods and services must be lower. Lower income families are probably already running into a choice between gasoline, housing and food.
Also bear in mind that as oil prices go up, so does everything else. Food prices are already climbing, in large part due to the price of oil. Food, Motor Fuel and all other commodities in this budget are becoming large constrictors squeezing the life out of the average household.
Look over these tables, compare them with your own income and consider what the rising price of gasoline will mean for you. And try to answer this question for yourself: at what price will you no longer be able to drive to work?
What are We to Do?
Whether this current period of oil speculation ends in a price crash or not, eventually declining oil production will kick in, and it will drive prices toward the high end of the above tables. At some point you will be faced with the choice: do I eat today or put gas in my car?
Here is my suggestion: sell all of your vehicles. Buy a subcompact, along with one or two motor scooters, and bicycles for everyone in your family. Use the motor scooters and the bicycles for most of your commuting. Use the subcompact only when your family is traveling long distance, or when you need to transport something.
Beyond this, we must push for the development of a real mass transportation system. Europe and Japan have monorails, so should we. For just a fraction of our current military budget, we could have a monorail system knitting this entire country together. Such a project would benefit homeland security more than the so-called "War on Terror." If we do not develop a decent mass transportation system, we will all suffer for it in the end.
Also, lobby your local government and businesses to redesign your community so that the groceries and other commodities you need are only a walk away. Grow your own food and start community gardens. And lobby to raise the minimum wage to a living wage that takes into account rising gasoline prices.
Ron Paul is not the Man
by
Dale Allen Pfeiffer
December 28th, 2007 (www.mountainsentinel.com) Ron Paul is not the man for me. Trusting an unregulated free market is like trusting a ravenous beast to watch over your children.
Certainly, the system we have is not working. Certainly we have to stop the imperialist conquest of the Middle East. Certainly we have to do something about the immigration problem. Certainly we have to find a better way to end inequality, be it racial or economic.
But simply cutting government oversight, adopting an isolationist policy and adhering to an unfettered free market philosophy will not solve any of these problems.
The current imperialist conquest of the Middle East is simply a new stage in the US-led conquest of the world. This is a conquest that began when the first Europeans set foot in America. It began with the conquest of the American Indians. The foundation of the empire was forged with slave labor and the sweat of an exploited working class.
Once North America was conquered its resources were used to consolidate its position as the preeminent power in the world. In the last century, that power was used to extort the wealth of the rest of the world. This stolen wealth made the US what it is. It made the American Dream a possibility, while impoverishing the rest of the world to do so.
Now we are entering a new era of contracting resources, even as our corporate overlords reach for a new global power base. So we must ensure our hold over the world's remaining resources through military might. We are trying to squeeze a little more room to grow, even as an economy predicated on constant growth begins to falter.
It is no wonder that foreigners are flooding this country, when we have stripped the resources from their homelands. Closing our borders will not solve this problem, no more than the drug war solve the ongoing flood of illegal drugs.
Likewise, segregation and other affirmative action policies of the mid-1900s do not work. Or to restate that, they achieved just as little as they were meant to do. A small portion of the black population was bought off, while others were told that they could aspire to the American Dream. Meanwhile the largest segment of the black population, which would have been subject to radical aspirations in its disenchantment with the system, was kept oppressed by the criminal justice system.
Much the same can be said for the working class reforms of the early 20th century. Their true success was in breaking the back of working class solidarity and resistance. They built a complacent class to stand as a buffer against worker dissatisfaction. By the mid-century any change of organizing a radical alternative was expunged from the political landscape. Generations of ignorant consumer sheep have been bred since.
If we would truly solve all of these problems, then first we must undertake a massive redistribution of wealth. The descendents of the American Indians and the descendents of the slaves are still owed restitution. The poor of the world are owed restitution. And the US working class is owed restitution. The playing field the whole world around must be leveled off. Only then can we talk about what system is to be put in place of the current failing and abusive system.
The US is only major power opposed to the UN Declaration of Human Rights. This declaration recognizes the right of every human being to food, clothing, housing and economic security. The US has long stood virtually alone in its opposition to this declaration because the recognition of such rights simply is not possible under the system of exploitation that we call the free market.
Without a doubt, Ron Paul will not sign the UN Declaration of Human Rights. Nor will he make any reforms or restitutions that will help to absolve the long standing inequalities and injustices mentioned earlier in this essay. What he will do is finish the work of George Bush and his predecessors, transforming the US into a fascist land where money rules absolutely.
Our Masters, Ourselves
by
Dale Allen Pfeiffer
This article originally appeared at carolynbaker.net.
Corrupt beyond Redemption
2/11/07 (www.mountainsentinel.com) Those of us living in the US live in a fascist system, right now, today. We live in a system where powerful corporations call the shots, both nationally and globally. They do this beneath a façade of democracy, a façade that has grown exceedingly thin. And every day they come closer and closer to allowing this façade to drop.
It should be quite plain by now that our government does not heed the public mandate. They have not stopped the war in Iraq, they have not moved to impeach Bush and Cheney, they refuse to discuss a working solution to global warming, and they will do nothing about outsourcing, capital flight and impoverishment of the US working class.
Yet activists in the peace, environmental and labor movements continue to lobby the government for change. We are content to wait until the next presidential election and replace the incumbents of one crooked party with the candidates of another crooked party. Yet no election is going to make the slightest bit of difference in solving the problems with which we are faced.
Our politicians are bought off. Most of them are members of the privileged class to start with, and once they leave office they will go to work for the very firms they should now be attempting to regulate. The move to privatize has reached critical mass; we have sold off our infrastructure and our vital government services to corporations — worse than sold, we have handed these things over while promising to subsidize their ownership with taxpayer's dollars. The privatization mania has gone to the point that we have now largely privatized our military and police services to private firms whose first loyalty is clearly not to the US public.
The building of a fascist system within the façade of democracy has been in progress for a long time. It can be traced back to the days of the Great Depression and even further. The move towards fascism accelerated in the 1970s and particularly in the 1980s. Privatization, outsourcing, labor and environmental deregulation, mergers and in particular media monopolies have all been tools in producing this transformation. Global trade agreements consolidated fascist power throughout the world, while formalizing the supremacy of international corporations over federal governments.
By the turn of the century, the advance of fascism had reached the point that corporations and political lackeys in the Bush administration could act with impunity, openly trashing the US Constitution and the Geneva Conventions while making jokes about it. What previous administrations used to do in secret, the Bush administration does in the open, and then grants itself immunity from future prosecution.
And now Bush has granted himself the power to abrogate the constitution and suspend elections through the declaration of martial law. He can do this for any perceived threat, whether it involves terrorism, economic crisis, environmental catastrophe, or social upheaval. Soon even the trappings of democracy will become unnecessary, and the US public will find themselves living in a repressive police state without any of the freedoms and protections from abuse that we have for so long taken for granted.
None of our elected officials wish to repair these breeches in our governmental system. Instead, they are all lining up to profit from them. Instead of taking up the public mandate, they are vying with each other to feed at the corporate troughs and assume the mantle of fascist dictator.
The Shame of Our Flag
The United States is the power behind world repression. Since World War Two we have made it our policy to support the corporate exploitation of resources and populations the world over, so long as the bulk of those riches flowed into the US to maintain US consumption and economic growth.
The US is the leading producer of greenhouse gasses. Yet the US is the one country that has refused to do anything about them. It is the top consumer of world resources, consuming at a level far exceeding the carrying capacity of the environment. As such, the US is largely responsible for resource depletion and mass extinction.
Yet even our gluttonous over-consumption is not enough to sustain economic growth. So we have turned to juggling bubbles of debt. The public is told that it is their patriotic duty to consume, consume, consume, even as their adjusted income continues to shrink. To fulfill our patriotic duty, we take out second and third mortgages, and we max out credit cards. Our debts are then repackaged and sold off as investments.
Now these bubbles are becoming unmanageable. Foreign investors, the other pillar of our economy, are beginning to divest themselves of the US dollar. A major economic crash is imminent, a crash that could make the Great Depression pale in comparison. Once this crash is complete, plans are already in place to replace the US dollar with the North American Amero, to establish the supremacy of the North American Union over the federal governments of the US, Canada and Mexico, and to keep the public in line through the establishment of a repressive police state.
Meanwhile the US Empire and the conquest of the rest of the world will continue. Under the guise of fighting a war on terror, we have assumed the right to attack any country we wish through so-called pre-emptive strikes. We can imprison anyone anywhere indefinitely, without filing formal charges. And we can use any amount of force necessary, even torture.
The country we live in has become a fascist empire. Our government and our corporations have joined together to commit crimes against humanity and crimes against the planet. If allowed to go on, all of us will suffer — all of us but our elite masters. That is, if their insane greed does not destroy this planet's ability to support complex life.
Something has to be done to stop this madness, the sooner the better. And that goal will not be achieved by voting, writing letters to our congresspeople, or marching on the capitol. Our only recourse to prevent the unthinkable is a major uprising.
Disinformation & Complacency
Right now, we simply cannot stage a successful uprising within the US. Those of us who are aware of the many issues I mentioned above are reaching the point where we know an uprising is necessary. But we do not have the numbers to pull it off. If we were to attempt such an uprising right now, they would simply round us up. If enough of us rose up, it would give them an excuse to declare martial law, formalizing their fascist dictatorship.
There are simply too few of us at this point. For each of us who recognizes the necessity of a mass uprising, how many people do we know who are unaware of the impending crises that we are facing? How many are somewhat aware, but think that these problems will be solved for us? How many still think that all we have to do is petition our elected leaders or vote the scoundrels out of power?
The public is uninformed. They do not know what crimes the government has committed and is committing under our names. They do not know what major crises are bearing down on us. They do not know that democracy is dead in the US and we live in a fascist system. They do not know this because the media they are exposed to does not discuss these things.
Our media conglomerates are part and parcel of the fascist system we live under. They will not permit an honest discussion of the problems we are facing. Or, if they allow such a discussion, then they will keep it framed in a fashion that supports the fascist system.
The majority of US citizens believe we invaded Iraq because Saddam Hussein was involved in 9-11. The war was necessary to fight terrorism. Sure Bush was wrong about the weapons of mass destruction, and his administration has fumbled this war all along. But we had to invade Iraq to fight the terrorists.
Back up. Who ever said that war was the way to solve the problem of terrorism in the first place? Terrorism is a problem for law enforcement. You hunt the terrorists down, you arrest them, you place them on trial and if they are found guilty you hold them culpable for their crimes. Then you resolve the problems of repression and desperation that give birth to terrorists in the first place. You do not declare war against other countries, using war (which is state terrorism) to increase the level of repression and desperation, breading more terrorists.
This is just one example. Where the media does allow discussion, it first establishes a framework that supports the overarching goals of the fascist system. And once the discussion is over, it lulls the public back into a stupor by moving on to sitcoms, cop shows, sporting events, OJ Simpson and Brittany Spears.
So if we are going to stop this madness, we need to begin talking to the people around us, helping them to understand the situation we are in. This can be a long process, depending on how far each person is sunk into denial and complacency. Talk to them, give them information, answer their rebuttals, but do not put too much pressure on them at one time. Let them digest what you have said and work through it for themselves. And move on with your argument when you perceive that they are ready for more.
Currently the US population is too complacent to stage a mass uprising. We have it too easy. To some extent or other, we are insulated from the problem. We have been co-opted by our own consumption and our 401k's. The media keeps us insulated from the real world, and the system keeps us comfortable.
But that is beginning to change. People are being squeezed tighter and tighter by the economy and corporate greed. Rising energy prices due to declining energy supply will have a growing impact on our lives from here on out. Life in the US is going to become increasingly uncomfortable from now on.
Talk to people about their discomfort, help them to understand how this relates to the world at large, the avarice of our corporations and the treachery of our political system. Minorities such as Blacks, Hispanics and American Indians are already well aware that we live in a police state. Reach out to them. The poor are well aware of how unfair our system is. Reach out to them. Yet be aware that the disaffected are already being preached to by media mouthpieces and by religious fundamentalists. But every day more and more people become aware that something is wrong. Reach out to them.
Drawing Momentum from the Crash
Oil has already peaked. Production began declining in 2006, and is now diminishing at a rate of 7% per year. The latest studies show that natural gas, coal and uranium will soon follow. (Steep decline in oil production brings risk of war and unrest, says new study. The Guardian, October 22nd, 2007.)
What, you mean you hadn't heard?
Overall, energy prices are going to keep going up. And as the price of energy goes up so will everything else. At some point, the economy will crash. Hunger will become a problem all over the world, even in once prosperous nations such as the US.
Global Environmental Outlook 4 has just been released. This is a publication of the United Nations Environment Programme (UNEP) produced by 390 experts using data compiled over the last two decades. They warn that we must act now to safeguard our own survival and the survival of future generations. (Save the planet? It's now or never, warns landmark UN report. AFP, October 25th, 2007.)
UNEP Executive Director Achim Steiner is quoted as saying, "The systematic destruction of the Earth's natural and nature-based resources has reached a point where the economic viability of economies is being challenged — and where the bill we hand on to our children may prove impossible to pay,"
The report also recognizes that overpopulation is a very real problem, something that many on the left refuse to acknowledge. The report warns that our population is now so large that we have exceeded the carrying capacity of the planet. The amount of resources necessary to sustain our population exceeds what is available.
Life on this planet, and life in the US, is going to become increasingly uncomfortable. More and more, people in the US are going to be caught in a bind. We will not be able to make ends meet, and we will discover that the system is failing us. As time goes on, the public will become increasingly dissatisfied and even angry.
It is up to us to reach out to these people, help them understand, and help them channel their anger and dissatisfaction to constructive ends. We can begin right now by seeking out others who are aware. Attend meeting of activists, particularly peace groups. I have found that people attending events sponsored by Veterans for Peace are particularly receptive to this message. Peace activists in general seem to be more aware than many other activists that they cannot reach their goals through the system. It also seems that global warming activists are more likely to believe that they can work through the system.
Attend meetings, and talk about how the system has become irredeemably corrupt. You will find others who have come to this conclusion. Talk about the necessity of a mass uprising, similar to the uprising in Venezuela following the US-backed coup against President Chavez. If the Venezuelans did it, so can we.
At a recent meeting that I attended, someone came up with an excellent suggestion. He said he would like to see people everywhere go out en masse and sit down on the highways and the expressways, stopping the flow of commerce. This is what we need to do: stop business as usual. We must bring the system grinding to a halt, insisting on a return to sanity, and a move toward sustainability and egalitarianism.
As things get worse, the time will come when people are ready to create such an uprising. For now, we must seek out those around us who already aware of the necessity. And we must do what we can to help wake up everyone we know.
Don't Fool Yourself
The government is already preparing to deal with public disaffection. Why else do you think they are rolling back our liberties and paving the way for martial law? They know all about energy and resource depletion and all the various other approaching crises. They know that life is going to become increasingly hard for many of us, and they know that those suffering these hardships are going to become troublesome. They know that some of us will try to organize an uprising, and they probably know many of us by name.
When the time comes, they think they can deal with us, and even use our efforts to their advantage. For that reason, we must make this uprising very organic in nature. There should be no leaders. There should be only the recognition that business as usual cannot go on and a willingness to do what it takes to bring the madness to a halt.
People need to understand that we are faced with a madness that will make life miserable for us and for generations to come, if it does not severely damage the viability of this entire planet. Yet they also need to know that each of us has the power to stop this madness, simply by ceasing to take part in the system that perpetuates this madness. We are all armed with monkey wrenches, it is time to use them. It is time to take back our power and to realize that we, ourselves, are our own masters. And let us never delegate that power or that responsibility again.
The Crash is a Good Thing?
by
Dale Allen Pfeiffer
Freefall
30/9/07 (www.mountainsentinel.com) Since Bernanke cut interest rates last Tuesday (Sept. 25th), the already weak dollar has gone into a tail spin. Bernanke's banker friends complained that they did not have enough money to cover their obligations and Bernanke responded by revving up the presses and printing up a slew of fresh funny money. In doing this he ignored the rest of the world, which was hoping that he would show some backbone and stand firm in support of the dollar. So now, everywhere you look, the dollar is losing its value against other currencies.
The Saudi's unpegged their currency from the dollar for the first time since the oil dollar was established. They had no choice; it would have been suicide for them to follow Bernanke's move. And elsewhere, other countries will have to follow suit or the US will drag them down. Japan is scrambling for shore.
Not long after the cut in interest rates, the dollar passed a key point against the Euro when it surpassed 1.41 dollars to one Euro. Since then the value of the dollar has continued to drop. The US dollar has been dropping against the Euro since January 2003. It now worth less than 59% of the value it had four years ago. At this point a dollar crash is nearly inevitable. US dollars may soon have as little value as confederate dollars.
For many years we have depended on foreign investors to support our economy by stockpiling our currency. These foreign investors cannot hold onto their dollars for much longer. Already they have lost over 40% of their investment. They will have to cut their losses and divest. This has already started to happen, and as the sell-off accelerates the dollar will find itself in a freefall which will quickly leave it a worthless currency. A massive sell-out could see the dollar losing as much as 90% of its value within days.
Snake Oil
You would not know any of this from the major news networks. They are trying to tell us that the drop in the dollar is actually a good thing. They reason that foreign consumers will flock to the US to buy devalued goods. This is a load of crap, and they know it.
US goods will not devalue. There are very few goods that are wholly US-made today. Most are at least partially manufactured offshore. Because of that, US goods will not devalue, they will simply go up in price. Soon, US consumers will find that their dollars can only purchase half of what they currently buy. And this ratio will worsen as the dollar continues to plunge. Once this crash is complete, US consumers will learn that they have lost everything. They will find that their salaries, their pensions, their health insurance coverage, everything is worthless.
So why is the media trying to sell us this lie? Simply to keep up consumer confidence. If US consumers understood what was really happening, there would be a panic. The truth could cause a run on the banks. Along with foreign investment, consumer spending is the only other pillar supporting the US economy. Consumer spending has already become sluggish. If the reality of our situation were understood, US consumer spending would quickly crumble.
The smart money is already fleeing the US market. It is diversifying into precious metals and a host of other currencies. It is quietly moving outside of the US. This migration has been going on for years, but now it is beginning to speed up. Yet, while this flight is going on, they want the general public to remain unalarmed. The smart money is trying to make its exit before a stampede blocks the fire doors. There were only so many lifeboats on the Titanic and the first class passengers were evacuated before anyone else was allowed out of steerage.
Black Monday and Bloody Tuesday
Monday, October 1st is the day of fiscal reckoning. October 1st is New Year's Day for businesses, and on that day all the banks are required to open their books and honestly assess their current standing. The fear for the last couple months is that more than a few banks may close their doors. On Monday, we will find out for sure.
For several years now, the banks have been playing wide and loose with loans and investments. Spurred by low interest rates, they lured in consumers and home owners into mortgages and loans that they simply could not afford. It used to be that a bank would underwrite and fund every loan it made. But in the past decade, banks have developed the practice of making loans, storing them on their balance sheets for a short period of time and then packaging them into derivatives called collateralized debt obligations (CDOs). These CDOs were then sold off to investors expecting a high rate of return on the investment. Through this mechanism, the banks did not tie up their own collateral with the loans they issued, so they could issue more and more loans.
CDOs were bought up by insurance companies, hedge fund managers, pension funds and even other banks throughout the world. Due to low interest rates, these managers even purchased CDOs with borrowed money. The CDOs themselves became collateral for more borrowing.
There are hundreds of billions of CDOs out there, and until now it has been mostly speculation as to what percentage is junk. Monday, October 1st the banks will have to fess up, and we will know once and for all whether or not they are capable of covering their losses. The losses in CDOs will be amplified and complicated by the problem of commercial paper.
“Commercial paper is highly-rated short-term notes that offer investors a safe haven investment with a yield slightly above certificates of deposit or government debt. Banks use the money to purchase longer-term investments such as corporate receivables, auto loans, credit card debt, or mortgagees.” (Wall Street Journal 9-5-07)
There is $2.2 trillion in commercial paper in the US. Much of this commercial paper is currently worthless because it is tied to toxic CDOs. Yet the banks are obligated to cover this commercial paper and refinance it regularly. Right now nobody will touch anything connected to CDOs, so the banks are sitting on whatever commercial paper they have in their possession and will have to cover its finances and make up for its losses on their own.
And here is the problem. The banks do not have the collateral to cover hundreds of billions in commercial paper and failing CDOs. So they have turned to the Fed, and their friend Bernanke has tried to come to their rescue by making billions in emergency bank loans and by lowering the interest rate. This lowering of the interest rate will not be used to lure in more shady mortgages. Nobody is offering mortgages right now. The funny money the Fed is currently printing up is supposed to help cover the banks' losses.
Unfortunately, it is too little too late. Nor would it solve the problem anyway. The toxic CDOs are still there, as is the commercial paper. At best, the lowering of interest rates will simply buy a little time, while making the crash worse when it does come. That is all Bernanke was hoping to achieve when he lowered rates last week. And he did this as a wager that the weak dollar would not unravel as a result.
That is precisely what is happening. The dollar is unraveling, and on Monday, October 1st, we will find out just how much help Bernanke provided to his banker friends. If the banking news is as grim as many analysts believe it will be, then we will hear of banks defaulting and closing their doors. Thousands of small businesses and millions of regular customers will find that they cannot access their accounts. Where they can do so, there may be runs on the banks until they do close their doors.
A Black Monday will likely be followed by a bloody Tuesday as the banking news leads to a route on the stock market. In this climate, the dollar is likely to plummet even farther as foreign investors hurry to divest themselves of their shrinking dollars. It could all be over for the US economy before the week is out. And we may well see our once vain public standing in soup lines by the beginning of November.
Police States & the North American Union
Yes, we already live in a police state. But after the economy crashes, they will act to consolidate this police state and bring it to a new level of repression. Protests will be dealt with severely and encampments of the homeless will be aggressively policed.
It is possible that they will ram through new debt regulation that could turn the US into a nation of debt-servitude. The power-players may walk away from their financial obligations, but they will not want the general public to do so. If you can declare Chapter 7 bankruptcy, do so right now. Otherwise, try to discharge all of your debts while the dollar still has some value.
Eventually the government will announce that it is abandoning the dollar and creating a new regional currency: the Amero. This new currency will coincide with plans for consolidating the US with Mexico and Canada. It will be announced as our answer to the European Union, and will be touted as the road to future prosperity.
It probably will bring some prosperity to large corporations. But for the rest of us, it will mean lower wages, environmental destruction, a strengthening of the police state and the further encroachment of fascism. The North American Union is just more snake oil to benefit the rich and oppress the rest of us.
Stock Up and Drop Out
What can be done to prepare for the worst? The best thing you can do right now is to stock up on essential goods before the dollar collapses and prices go up. Purchase dried goods such as beans, grains, flour, dehydrated milk and dried fruit. It would be wise to stock enough of these durables to last your family for a month. Keep them someplace dry and air tight.
You might also invest in other items such as soap, razor blades, batteries, gardening seeds, socks, and other small but important items. A good supply of fishing gear could come in handy. Bicycles, spare tires and bicycle trailers would also be good items to have around.
These are goods that you will find useful. They are also goods that will have a high barter value if the dollar becomes worthless. If you think about it for a while, you can probably come up with a long list of such items. Things such as deodorant, spices, solar stoves, water purification kits and/or tablets, antibiotics, vitamins and other first aid supplies could also be worth a premium.
After stocking up, it is time to wash your hands of the system which has brought us 9-11, the "War on Terror," global warming, energy and resource depletion, environmental destruction and increased economic disparity. George Bush told us how to do this when he told us that it was our patriotic duty to consume.
Stop consuming. Find some like-minded people and work on disconnecting yourself from the system. Default on your debts if you can and pay them off if you cannot. Leave your job and find a way to support yourself outside of the system. Stop going along with business as usual and build that sustainable lifestyle that we all know is the only sane alternative. Don't put it off any longer. Start right now while there is still a chance. Or you will find yourself slaving away in a collapsing police state in short order.
In Case of Martial Law, Break Glass
by
Dale Allen Pfeiffer
Please Distribute Widely
15/09/07 (www.mountainsentinel.com) Bush now has the ability to declare martial law at his own discretion, and in so doing dissolve the other branches of government, throw out the constitution, and suspend elections. He appropriated the right to do this largely by executive order. He can declare martial law whenever he deems there is sufficient cause; cause being an act of terrorism, an economic crisis, an act of war, civil unrest, or a natural catastrophe. For more information about the executive orders and legislation granting Bush these rights, please watch the short video at mountainsnetinel.com (What We Choose to Ignore), or visit the US Martial Law Timeline.
Hard as it might be to believe, there is a very real possibility that Bush will exercise these rights before his term ends. All he needs is an excuse. At present, the economy is on the verge of collapse, the Iraqi Occupation is going badly no matter what Bush and his chosen generals say, energy supplies are unable to keep pace with demand, disapproval of the Bush administration is growing, and Bush wants to attack Iran and so complete his Middle East conquest. He has all the reason in the world to declare martial law. All he lacks is a sufficient excuse.
